Intel Earnings: What to Watch

Intel’s third-quarter earnings are all but certain to again reflect a shrinking market for personal computers. But the rate of contraction seems to be easing, and servers might provide a countervailing lift.

The Silicon Valley giant, which reports results after market close Tuesday, for years benefited from its near-monopoly on PC processors. But that specialty turned into a liability when consumer dollars started flowing to smartphones and tablets, where chip designs from ARM Holdings prevail.

Wall Street is expecting earnings of 53 cents a share, according to Thomson Reuters, down from 58 cents in the year-earlier period. Revenue is expected to rise slightly to $13.47 billion from $13.46 billion. The company’s conference call is scheduled for 5 p.m. E.T. Here are key points to look for in the report:

1) How Bad Is the PC Business: IDC last week said world-wide PC shipments fell 7.6% in the third period — better than the 9.5% drop it had projected — while Gartner put the decline at 8.6%. Intel’s numbers often vary; it counts sales to PC makers rather than sales the PC makers make to others. Intel’s data also include smaller manufacturers that analysts can’t track. Any new indications about demand could affect Intel’s share price.

2) Are Intel’s New Chips Getting Any Traction? Two Intel chips under a microscope: Haswell, a new member of the mainstream Core chip family that touts much longer battery life in laptops, and Bay Trail, Intel’s most promising candidate yet for tablets. Any comment from Krzanich about either product will be closely watched.

3) How Fares Data Center Demand? Web companies like Facebook and Google are the main driver for server demand these days, and Intel has some new offerings that could encourage such buyers to upgrade their hardware. Servers don’t sell enough units to fill Intel’s factories, but they are extremely profitable.

4) What’s the Holiday Outlook? IDC and Gartner said back-to-school PC sales were weak. Investors will pay close attention to Intel’s comments about revenue and gross profit margin in the fourth quarter, which historically accounts for an even greater percentage of annual revenue than the third period.

Note, an earlier version of this item incorrectly spelled Krzanich’s first name as Bryan.